116 Columbia Law Review 927 (2016)
Antitrust courts often confront “mixed” conduct that has two contrasting effects, one harmful and the other beneficial. For example, a nationwide agreement not to pay college football players harms the players, while benefiting fans of amateur sports. An important tool for analyzing mixed conduct is to compare the action to a hypothesized alternative, and ask whether the alternative action is “less restrictive” and hence less harmful. The less restrictive alternative (LRA) test is used widely, from the rule of reason to mergers to monopolization. The test often assumes a particular, narrow form, that the alternative must be dominant: not only less restrictive but also equally effective. In other words, could the benefits have been achieved equally well with less harm?
This Article offers a new account of the LRA test that draws inspiration from constitutional law and other fields. Dominant LRAs offer a shortcut that avoids the difficult tradeoff between increased benefit and increased harm. However, most LRAs are less effective, rather than dominant. Such alternatives offer a basis for condemning conduct when they are preferable on balance. Balancing in antitrust is not a myth, as many believe; instead, the tradeoff of incremental benefit and harm occurs in the assessment of LRAs. I also demonstrate how the LRA test serves to “smoke out” an inference of anticompetitive effect.
As the Article shows, courts that restrict their analysis to dominant LRAs run a high risk of false negatives, particularly when they also ignore the overall competitive effects of the restraint, as in the recent O’Bannon v. NCAA decision. Finally, the Article proposes best practices in assessing LRAs to minimize the risk of false positives.
Date of Authorship for this Version
ancillary effects, less restrictive alternatives, merger-specific efficiencies, narrow tailoring, overinclusiveness, underinclusiveness
Hemphill, C. Scott, "Less Restrictive Alternatives in Antitrust Law" (2015). New York University Law and Economics Working Papers. 417.